Sabre rattling aside, US and China have bigger domestic challenges to deal with

Not surprisingly, the controversial visit to Taiwan by the Speaker of the US House of Representatives Nancy Pelosi on Tuesday (Aug 2) was met with China’s missile tests and military drills around the island as Beijing warns against separatist activities seeking “Taiwan independence”. More than 20 Chinese military planes flew into Taiwan’s air defence zone as Pelosi began her controversial visit to the self-ruled island that Beijing considers its territory.

Chinese State Councilor and Foreign Minister Wang Yi condemned the visit by the highest-ranking US official to the island in 25 years. He said the move “seriously violates the one-China principle, maliciously infringes on China’s sovereignty and blatantly engages in political provocations”. China’s state news agency Xinhua reported that China will stop the import of citrus fruits including grapefruits, lemons and oranges, as well as chilled hairtail and frozen horse mackerel from Taiwan, with immediate effect. The export of sand to the island will also be suspended. 

Pelosi kicked off a 4-day trip to Asia on Monday with a visit to Singapore, where Prime Minister Lee Hsien Loong highlighted the importance of stable US-China relations for regional peace and security. Her visit to Taiwan on Tuesday night, a day after the 95th anniversary of the founding of the People’s Liberation Army, is expected to keep the markets at tenterhooks for some time, as investors watched to see if there is any risk of an escalation when she leaves the region.